The plot has thickened for sneaker reseller Michael Malekzadeh.
Commonly known as Zadeh Kicks, he’s now been charged with wire fraud to the tune of $85 million. He was the owner of the now dissolved company that allowed sneakerhead to cop their coveted sneakers at a premium without fighting bots and banging on their keyboards for the latest releases.
According to the Department of Justice, Bethany Mockerman, the chief financial officer, has also been charged alongside him for conspiracy to commit bank fraud.
The company started up in 2013 and at first offered sneakers for sale that he’d been able to attain and just marked up the price. While that’s commonplace in the sneaker world, things got sticky when Zadeh began to sell preorders for upcoming releases and raked in millions before he even had the sneakers in stock.
Prosecutors have an example of this scheme from 2021 when Zadeh caught a lick off the Air Jordan 11 Cool Grey hype that was ensuing by accepting 600,000 preorders, which amounted to over $70 million. However, he could only acquire a mere fraction of the pairs he promised.
“Malekzadeh had no way of acquiring the quantity of sneakers needed to fill the preorders received. In fact, he was only able to acquire just over 6,000 pairs. Customers were either left with unfulfilled orders, or they received a combination refund of cash and Zadeh Kicks gift cards,” writes the Department of Justice.
After continuously pulling off the fraud, Zadeh reportedly owed millions of dollars worth of sneakers and used his CFO to create and provide false financial statements to several banks after initially receiving over $15 million in loans.
As the government continues to investigate, much of the luxury life Zadeh created for himself has been seized, with the government stating that “federal agents have seized millions of dollars in cash and luxury goods that Malekzadeh acquired with the proceeds of his fraud. The seized items include nearly 100 watches, some valued at over $400,000, jewelry, and hundreds of luxury handbags. The government also seized nearly $6.4 million in cash which was the result Malekzadeh’s sale of watches and luxury cars manufactured by Bentley, Ferrari, Lamborghini, Porsche, and others.”
Currently, Malekzadeh and Mockerman are both cooperating with the investigation.